Financial Sector: Who’s Set for Margin Growth and Who’s Not?

Financial Sector: Who’s Set for Margin Growth and Who’s Not?
1:09
Published on: Jul 23, 2024 7:00:00 AM

The #EasyAssetManagement team reports that the financial sector is set for a slow margin recovery with a low point expected in Q2 2024, and a full return to pre-pandemic levels won’t happen until early 2025, with some companies expected to perform better than others.



The financial sector is projected to experience a gradual net margin recovery, with a potential trough in the second quarter of the year. While consensus estimates indicate a sector-wide net margin of 18% for the quarter, this figure remains notably below pre-pandemic peaks. The consumer finance and banking subsectors have been particularly impacted, with margins significantly lower than their pre-2020 highs.

A full recovery to pre-pandemic margin levels is not anticipated until early 2025.

However, there is potential for variation within the sector, with certain companies like KKR, KeyCorp, Goldman Sachs, Allstate, and Schwab expected to demonstrate stronger margin expansion compared to others.
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Conversely, PayPal, Arch Capital, JPMorgan Chase, Nasdaq, and CME may experience margin contraction.


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Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an external contributor as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

 

Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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